DETROIT: Working-class car buyers will be the hardest hit by US President Donald Trumps 25pc tariff on imported vehicles because almost all low-cost new cars sold in the United States are built elsewhere.

Lower-income buyers will suffer another blow from expected hikes in used car prices as demand surges and supply shrinks.

New cars priced under $30,000 are already rare as the average new-vehicle price approaches $50,000. The only way automakers can eke out profits on economy cars, analysts say, is to build them in nations with lower manufacturing costs.

A review of data from two auto research firms found just 16 models with an average sticker price less than $30,000 and only one, Toyota’s Corolla, that is assembled in the United States. All others are made in Mexico, South Korea, or Japan.

Slapping a 25pc tariff on these low-end cars may force price increases that make them unaffordable to their target market or cause some automakers to abandon them entirely, industry analysts said.

New vehicles across the board are going to be more expensive,” said Sam Fiorani, vice president of research firm AutoForecast Solutions. “That’s going to push more buyers into the used market, which will also raise the price of used vehicles.

Burnis Carrington, of Monroe, Louisiana, is shopping for a used car instead of a new one, as he worries about tariff-driven price increases. Most families in need of a family car are paying prices that approach nearly half of what their home may be worth, he said. The underlying problem is still that nothing is being done to make the vehicles made domestically more affordable.

Trumps political base of rural supporters could be among those bearing the brunt of the import taxes. About half of voters reporting household incomes of less than $50,000 annually backed Trump’s 2024 election, along with 56pc of voters without college degrees, according to an Edison Research exit poll.

Trump told NBC news on Saturday that he “couldn’t care less” if automakers hike prices, “because if the prices on foreign cars go up, they’re going to buy American cars.” Many of those foreign cars are made by American automakers, including three under-$30,000 vehicles from GM: The Buick Envista and Chevrolet Trax and Trailblazer. All three are made in South Korea. GM also makes hundreds of thousands of its hot-selling full-sized trucks in Mexico. Trump argues tariffs will spark a boom in the US auto industry. Some experts contend that high import taxes will have the opposite effect.

As vehicle affordability decreases due to higher prices, households may begin prioritizing other areas of their budget, cutting back on discretionary spending or delaying large purchases,” conservative supply-side economist Arthur Laffer wrote in a March report.

Detroit automakers General Motors, Ford, and Stellantis, the maker of Jeeps and Ram trucks, have discontinued most entry-level models in recent years to focus on highly profitable trucks and SUVs. That has left the economy-vehicle market almost entirely to Asian automakers. I just don’t see them ever really going back there, said Karl Brauer, executive analyst at iSeeCars.com.

Ford makes its least expensive vehicles, the compact Maverick truck and mid-sized Bronco Sport, in Mexico.

Published in Dawn, March 31st, 2025